Some of the Key points being highlighted in SBD are:
-Bidding will be done on single parameter i.e “capacity charge” (comprises of RoE(Return on Equity,Interest on Loan Capital,Depreciation,Interest on Working Capital, Operation & Maintenance cost ,Cost of secondary fuel,special allowances in case of R & M of a thermal power plant).
-The basic building of SBD is adopting DBFOT Model(Design,Build,Finance,Operate and Transfer)which says the power plants will be transferred to contracting DISCOMs after the completion of the project life.
– Fuel charge will be a pass through component and it will be reflected in the distribution tariff as quoted.
-Incentive will be provided to the developers on improving the Station Heat Rate(The Station Heat Rate of a conventional fossil-fueled power plant is a measure of how efficiently it converts the chemical energy contained in the fuel into electrical energy,usually expressed in Kcal/KWh).
-Land acquisition will be procured by the utility as the concessionaire may face difficulty for getting the land at the aforesaid location.

Future Scenario
With the finalisation of the revised SBD for Case 1,more states will initiate the process of issuing RFPs thereby giving the clarity on SBD.Provisions related to tariff revision and acceptance of Long Term power procurement as compared to short term would also drive states to procure more power.Changing sector dynamics of policies and regulations is a positive sign for the sector and thus making India a more competitive one.

Mundra UMPP was first to commence its operations with commissioning of 3 x 800 MW units in 2012 and last unit was synchronized in Jan 2013 which were quite ahead of their schedule. CGPL (Coastal Gujarat Power Ltd.) -TATA’s wholly owned subsidiary(SPV) has been incurring losses due to change in the regulatory framework in Indonesia’s coal regime(http://news.mitraismining.com/pages/IndonesianMiningRegulation.aspx)
In July 2012,TATA Power sought a tariff hike in lieu of change in coal prices as DISCOMs refused to revise the PPA terms.In its tariff petition of TATA,it has stated that hike in Indonesia coal prices will lead to rise in generation cost by Re 0.67- Re 0.70/Unit,thereby denting the cash flow statements of TATA Power.Inspite of this deadlock of tariff,TATA Power continue its operations of Mundra while R Power stalled work at the Krishnapatnam UMPP.R-Power held that the operations could start only after the revision of Standard Bidding Documents signed with DISCOMs.Delhi High Court has suspended the petition filed by R Power and thus they have plans to approach CERC.

On the other hand,Sasan UMPP has made the steady progress. The first 660 MW unit is expected to commission by 2012-13.In Jan 2013,465 kV switchyard was commissioned in order to provided initial start up power.R Power has plans to commission the remaining units with a time interval of 3-4 months.As far as Coal production is concerned from Moher and Mpher Almohri,its much ahead of the targeted time frame. R Power is also struggling with legal hurdles w.r.t ambiguity of coal usage.Company was asked to stop production in the aforesaid coal blocks in lieu of R Power’s linking the Coal Scam by CAG.

R Power’s third UMPP Tilaiya has faced many delays due to challenges in obtaining forest clearances and land acquisition. As of Nov 2013,Stage II forest clearance has been awarded thereby keeping the project in limbo.

Progress on the bidding process of only 2 UMPPs (Sarguja-CHattisgarh and Bedabahal-Odisha) have stalled as the coal block areas have been classified as No- Go areas. by MoEF. Despite the elimination of problem of Go/No Go areas ,the bad omen of clearances still pending with Sarguja UMPP.Bedabahal UMPP re invited pre qualification bids as it has been awarded green signal as far as MoEF is concerned.
MoP has finalized a new set of SBDs for UMPPs but the approval is still awaited from EGoM.The ministry has proposed separate rounds for Coal linkage and Captive coal blocks. Moreover,the bidding of UMPP will be based on first year tariff rather than 25 year levellised tariff.(http://www.powermin.nic.in/whats_new/pdf/Guideline_for_determination_of_tariff_and_SBD_for_case_1.pdf)
Earlier, in Oct 2012 CERC had suggested revising UMPPs on BOO Model rather than DBFOT Model. Moreover,there was a proposal to supply 100% of the coal to the power plants fulfilling the shortage through coal import.
Thus in the light of various issues,the development if UMPPs have been questioned by power plant developers.There is a need to build flexibility within the PPA structure to deal with uncertainties in a manner that is quantifiable for the prospective investors.